Use the following to answer questions:
Figure: The Market for Hybrid Cars 
-(Figure: The Market for Hybrid Cars) Look at the figure The Market for Hybrid Cars. What area represents deadweight loss if there is a binding price floor at P1?
Definitions:
European Option
A variety of option agreement that is exercisable solely on its expiry date, with no possibility of earlier execution.
Black-Scholes Option Pricing Model
A mathematical model used for pricing European call and put options based on variables such as asset price, strike price, volatility, interest rate, and time to expiration.
Conversion Ratio
In finance, the ratio at which one form of security (such as convertible bonds) can be exchanged for another form of security, such as stock.
Conversion Premium
The extra amount an investor pays above the convertible security's underlying asset value, reflecting the cost to convert into equity at a later date.
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